Bank of Japan raises policy rate to 1.25%
The Bank of Japan raised its policy rate to 1.25 percent from 1 percent in a 7-2 vote, with governor Kazuo Ueda saying the bank has shifted focus to prevent underlying inflation from overshooting the 2 percent target. Ueda left the door open to back-to-back hikes or 50 basis point moves and said the BOJ aims to act pre-emptively to avoid large disruptive moves. Two dovish board members dissented and the yen weakened after the decision. The BOJ noted wholesale inflation remains elevated and said financial conditions are still accommodative.
BoJ raised its policy rate to 1.25 percent.
Context
The BOJ exited a decade of stimulus in 2024 and has raised rates several times. Other major central banks are tighter, and markets now watch whether the BOJ hikes faster. The next steps could be further BOJ rate moves and continued yen…
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